As US Treasuries waver, is a Bitcoin Supercycle coming?

▲ Bitcoin (BTC), Dollar (USD) ©

A forecast has emerged that Bitcoin (BTC) could enter a 'super long-term supercycle', moving beyond being merely a risk asset. The analysis suggests that as US and Japanese government bond yields soar, central banks will inevitably choose currency debasement, and in that process, Bitcoin, with its limited supply, will emerge as an alternative asset.

According to investment specialized media FXStreet on May 25 (local time), Xiang Wu, a senior research analyst at cryptocurrency exchange BitMEX, diagnosed that the recent surge in US and Japanese government bond yields is a sign of a structural shift, stating that "the possibility of a Bitcoin supercycle is increasing." The US 30-year Treasury yield recently surpassed 5.14%, and the Japanese 10-year government bond yield also rose to 2.8%.

Wu analyzed that the current level of interest rates is difficult to sustain in the long term. He argued that central banks are ultimately forced to choose between 'national debt collapse' and 'currency debasement'. He explained that with the US national debt already exceeding $39 trillion, coupled with geopolitical risks in the Middle East and rising energy prices, the fiscal burden is growing.

The media reported that while central banks generally raise interest rates to curb inflation by reducing lending and consumption, in the current US fiscal structure, high interest rates could have the adverse effect of skyrocketing the government's interest burden. Wu warned, "In a national debt situation of $39 trillion, if current interest rates are maintained, government interest expenses will eventually consume most of the federal tax revenue."

Accordingly, the possibility of central banks supporting the market through liquidity provision instead of direct quantitative easing has also been raised. Wu and macroeconomist Lyn Alden analyzed that indirect methods of liquidity expansion, such as Yield Curve Control (YCC) or undisclosed government bond purchases, could continue. The market anticipates that such trends could heighten concerns about fiat currency debasement and stimulate demand for Bitcoin.

The media analyzed that Bitcoin, as a digital asset with a limited supply, has the potential to be re-evaluated as an inflation hedge in the long term. Particularly, if government bond market instability and central bank policy shifts occur simultaneously, the trend of institutional funds moving from traditional bonds and cash equivalents to Bitcoin could strengthen.

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